We will use your email address only for sending you newsletters. Please see our Privacy Notice for details of your data protection rights.
After five days of continued growth for the pound, it suddenly fell against the euro yesterday following the resumption of Brexit negotiations between EU and UK leaders. With the end of the transition period fast-approaching, officials are working hard to hammer out ahead of December 31.
The clock is ticking ever quicker with the need for hammer out plans by the end of October in order to ensure enough time for any necessary ratifications.
The pound is currently trading at a rate of 1.0939 against the euro according to Bloomberg at the time of writing.
Though coronavirus and the subsequent economic fallout of lockdown measures have been a key focus for traders in recent months, it is likely Brexit will take centre stage in the coming days.
Michael Brown, currency expert at Caxton FX spoke exclusively with Express.co.uk to share his insight into the current exchange rate.
“Sterling notched its first loss in 5 against the euro yesterday, with the euro gaining ground as a result of supportive month-end flows, and a lack of further Brexit positivity failing to give the quid a boost,” he said.
“Looking ahead, a relatively quiet calendar awaits today, hence attention will remain on the negotiations in Brussels, and whether enough progress is made to move into the ‘tunnel’ stage at the end of this week.”
Trading relationships between Britain and Northern Ireland remain a key issue, alongside fishing rights, state subsidies and the rights of citizens.
Ongoing talks this week will hope to secure agreements between the UK and EU around these issues.
Flights: Airline upgrades passenger for ‘odd’ reason [INSIGHT]
Latest FCO advice for Mediterranean islands including Cyprus & Greece [ADVICE]
The eight countries Britons can travel to without any restrictions [MAPPED]
There will also be focus on the “controversial” Internal Market Bill, which was been approved by MP votes yesterday.
In recent weeks EU officials have fought back against the bill.
“The British Pound became more sensitive to Brexit-related updates over September and jumped over 1 percent yesterday thanks to optimism expressed by the UK and EU about securing a trade deal,” said George Vessey of Western Union Business Solutions.
“However, the rally was short-lived as the controversial internal market bill is still unnerving investors and threatens to derail the negotiating process.
“Nevertheless, crucial trade talks will continue despite the legal threats from the EU.
“There are tentative signs of progress with more intensive and secretive talks on the horizon as the countdown to the end of the transition period draws nearer. “
However, the expert adds that there are likely some bumps in the road ahead for the exchange rate.
Mr Vessey added: “Both sides have set a preliminary deadline for next month as it will take some time to sign off any deal, so October has the potential to generate wild fluctuations in the currency market as result.”
For those planning an Autumn break to Europe, it could be confusing to determine when is best to purchase travel money.
Experts usually recommend planning in advance and buying all of your holiday cash when the rates appear at their best.
However, amid travel corridor uncertainty, coupled with ongoing Brexit discussions, Paul Brewer, CEO of Currency Online Group has an alternative suggestion.
“Many people buy their holiday cash at a time when the rate is favourable even if that is months ahead of their actual trip,” the expert explained.
“In normal times, this is very sensible as it locks in a good rate meaning they get more for their money.
“However, with unexpected changes in the quarantine rules week by week and with so much other uncertainty, this can leave you stuck with thousands of pounds worth of currency you can’t use.”
Given that so many changes lie ahead, preparation is crucial.
“The best thing for people to do is to buy half of your travel cash early at a good rate,” continued the travel money expert.
“Then nearer the time of your holiday, weigh up the risks and potential for disruption to your travel plans.”
Source: Read Full Article